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Accounting treatment of bank guarantee commission charges

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Querist : Anonymous

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Querist : Anonymous (Querist)
23 July 2014 Our Client has given Bank Guarantee to EPCG of Rs 5.55 lakh for import of machinery. BG is valid for 10 years. Our client has capitalised BG charges in the cost of Plant and Machinery.

What will be the correct Accounting treatment?
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Vishnu Saboo

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Vishnu Saboo (Expert)
23 July 2014 since this is specific expense for machinery, in my opinion this may capitalise.

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